The RHI was originally expected to be introduced in April this year, but it has subsequently been delayed until June, and speaking yesterday Barker would only confirm that the incentives would be delivered "later this year".

Speaking at the inauguration of a £4m heat pump at London shopping centre One New Change, Karl Draye, operations director of Geothermal International, questioned the government's repeated delay of the RHI and warned it could damage the industry.

The incentive survived the Comprehensive Spending Review but has been dogged by speculation since Chris Huhne admitted to forgetting about the RHI when writing the coalition agreement.

Draye told BusinessGreen that a speedy introduction of the RHI was vital to lowering the risk of installing ground or air source heat pumps by shortening payback times, making the technology far more attractive to small businesses and social housing providers.

Current renewable heat systems account for around one per cent of the heat generated in the UK, which is well short of the government's target of generating 12 per cent of heat from renewable sources by 2020.

Draye insisted heat pumps could increase the sector's impact on the mandatory EU renewable energy targets while providing a valuable source of jobs. "This technology is real, it is possible, and it can make a contribution," he said. "The whole industry is waiting with whatever is greater than bated breath for the RHI."

Geothermal International is part-owned by utility company SSE, whose chief executive, Ian Marchant, told BusinessGreen that the delay of the RHI had left a company heat pump project in Scotland "on a knife edge".

He also said ground source heat pumps could become "the technology of choice for all large buildings" with the right incentive structure and warned that without an RHI, companies would pursue electricity projects instead.

"The RHI does two things: it shortens the payback, which is important psychologically, but more importantly it [moves us towards our] target for energy," he said. "We have incentives for electricity, but not heat and we're in danger of doing too much electricity at a high cost and not enough heat. The RHI shifts the question from 'should I or shan't I?' to 'why won't I?'."

But when these concerns were put to Greg Barker, the climate change minister could only reiterate that the government was continuing to work on the details of how the RHI will operate.

"We're making good progress but I can't disclose any details until later this year," he told BusinessGreen.